Lopez Holdings to undergo debt restructuring

MANILA, Philippines—Listed Lopez Holdings Corp. is aiming to completely restructure all its outstanding debt by the end of the year to ease the burden on its finances that has persisted for over a decade and has kept the firm from expanding more aggressively.

At the company’s annual shareholders’ meeting on Wednesday, Lopez Holdings (formerly known as Benpres) said its outstanding debt now stood at $65 million, from as much as $560 million in the late 1990s.

Of this amount, $24 million has been restructured, with creditors granting friendlier terms for the Lopez group. The company is trying to cut the same deal with creditors holding the remaining $41 million.

Another option for the firm is to offer its creditors a debt buy-back option, wherein the company will pay only 60 cents for every dollar it owes.

The value of the company’s dollar obligations ballooned over a decade ago as the Asian financial crisis sent the peso plummeting. This made it harder for the company to repay its dollar-denominated loans using money earned in pesos.

“We are now closer to a financial position to give our shareholders a return on their investment,” Lopez Holdings CEO Salvador Tirona said.

“We want to hold off any new investments until we can give dividends to our shareholders,” he said.

Bulk of the company’s loans was repaid using the proceeds of the sale of major assets. These include its controlling interests in Manila North Tollways Corp. (MNTC) and the former family crown jewel Manila Electric Co. (Meralco).

Both Meralco and the MNTC are now controlled by the group of businessman Manuel V. Pangilinan.

Tirona said the company would repay its remaining debt using earnings from its remaining assets, namely broadcast giant ABS-CBN Corp. and power generation holding firm First Philippine Holdings Corp. (FPHC).

FPHC currently holds controlling interests in Energy Development Corp., one of the world’s leading producers of geothermal power.
ABS-CBN, meanwhile, is one of the nation’s leading television stations. It also owns Sky Cable Corp., the country’s leading cable TV service provider.